Setting up Business in India – What Foreign Companies Must Know

Setting up Business in India – What Foreign Companies Must Know

Foreign companies may set up business in India any kind of one of pursuing manners while retaining its status for a foreign company:

Liaison Offices – A foreign company can open a liaison office in India to take good care of its Indian operations, to promote its business interests, to spread awareness within the company’s products this particular explore further placements. Liaison offices are not allowed to stick with it any business or earn any income in India and all expenses are to be borne by remittances from abroad.

Project Offices – The project office is the ideal method for companies to establish a business presence in India, if the object is to possess a presence for a limited period of time. It is essentially a branch office launched with the limited purpose for executing a specific undertaking. Foreign companies engaged in turnkey construction or installation normally set-up a project office for their operations in India.

Branch Offices – Foreign companies engaged in manufacturing and trading activities outside India may open branch offices for the purpose of:

oRepresenting the parent company or other foreign companies a number of matters in India, like acting as buying and selling agents.

oConducting research, wherein the parent company is engaged, provided the outcome of this research are made in order to Indian companies

oUndertaking export and import trading activities.

oPromoting technical and financial collaborations between Indian and foreign companies.

Trading companies – Foreign companies may invest in trading companies engaged primarily in exports. Such trading companies are treated at par with domestic trading companies in accordance with the trade policy.

The RBI accords automatic approval for foreign equity up to 51 per cent for setting up trading companies engaged primarily in exports. All other proposals, which do not meet the criteria for automatic approval, can be addressed to the Foreign Investment Promotion Board, i.e. “FIPB”.

Wholly owned subsidiaries – Foreign companies may set up a wholly owned subsidiary, which is an Indian Company a great independent legal status, distinct from parents foreign company.

Under the current foreign investment policy, a wholly owned subsidiary can be established either under the automatic route, in the event the conditions specified therein are complied with (specific high priority industries) or obtain an approval from the FIPB.

Joint venture companies – Foreign companies may set up a joint venture company i.e. economical collaboration with an Indian business house/company Online LLP Registration in India India, which is an Indian Company with an independent legal status, distinct from the parent foreign company.

Under the current foreign investment policy, a joint venture can be established either under the automated route, if the circumstances specified therein are complied with or obtain an approval from the FIPB.

Foreign companies intending to construct any kind of office mentioned previously activities portion of the parent company or foreign trading companies in India for promotion of exports from India for you to obtain a previous approval from the Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval for these cases, permission is granted initially to secure a period of three years, foreclosures the condition that expenses of such office in order to met exclusively out of inward remittances; such offices are not permitted to get any income in Of india.